A number of fees are incurred when purchasing real estate in Japan, including taxes paid on the basis of Japan's particular legal and regulatory requirements as well as processing fees paid to the real estate agent. Other fees, such as management fees and repair fees, are also incurred after purchase. Here, we will provide information related to receiving funds as well as fees incurred before and after real estate purchases and items to be aware of when leasing property you own.

The obtaining of real estate loans by non-residents of Japan

Essentially, it is difficult for non-residents to obtain loans from Japanese banks, and if you cannot take out a loan, you must either make the purchase in cash or arrange for funds through a loan from your home country. We recommend that you have a plan for obtaining funds before you look for property.

If you are purchasing property to use as housing

It is sometimes possible for foreigners to obtain loans from Japanese banks if they are going to be living in Japan. Generally speaking, having a permanent residence visa is required, but some banks may let you borrow money without having one. You should inquire at specific banks for details.

For Realestate investors

Generally speaking, you cannot obtain a loan from a Japanese bank if you are a non-resident of Japan.

Fees associated with real estate purchases

When purchasing real estate in Japan, in addition to the actual cost of the property, you will have to pay an additional 5–8% infees.

Contract-related fees

  • The fee for the revenue stamps attached to the sales contract
    (If the purchase cost exceeds ¥1 billion, the fees will depend on the cost of the property.)
  • Brokerage fees (half the amount)
    Purchase cost × 3.3% + ¥66,000 (tax included)

Fees related to settlement and handover

  • Brokerage fees (remaining amount)
  • Registration and license tax
    For registering ownership transfer, etc.
  • Payment to layers for registration procedures
    Approximately ¥100,000–¥150,000
  • Fixed asset tax, management tax, and other settlement fees
    Daily rate adjustment according to the handover date

Fees incurred after property handover

  • Real estate acquisition tax
  • Disaster insurance premiums
  • Moving costs
  • Renovation fees

Fees incurred yearly after property acquisition

  • Fixed asset tax
    Levied by the Japanese government, this is 1.4% of the value of the fixed asset
  • City planning tax
    Levied by the Japanese government, this is 0.3% of the value of the fixed asset

Example of (yearly) fixed asset tax and city planning tax

The amount of tax varies according to the property's location, size, and other details. For example, for a condominium in Roppongi, Minato Ward, Tokyo (built in August, 2012/240 units in total/80 Sq.m. of occupied space):

  • Total: ¥224,846
    Tax for the land: ¥38,004 in fixed asset tax, ¥8,255 for city planning tax
    Tax for the building: ¥127,871 in fixed asset tax, ¥50,716 for city planning tax
    ※Land value is taxed according to the equity method at 4,087/100,000.

Condominium management fees, maintenance fees, and fixed asset tax, etc.

Japan has a "sectional ownership law" and a "homeowners association" system under which people who own and live in the same condominium complex must jointly manage the building and grounds. For that reason, there is generally a management fee for that purpose as well as a maintenance fee that goes toward common-use area of future building repairs, and the owner must pay these fees each month. The maintenance fee in particular is reviewed every few years and may be adjusted by the management association of homeowners in accordance with the long-term repair plan.

The need for an agent to pay taxes and other fees on behalf of non-residents

If a non-resident of Japan acquires property as an investment or second house, it will be difficult for that person to pay fixed asset tax, city planning tax, management fees, and maintenance fees, as well as to collect rent. Therefore, most people in this situation entrust these tasks to an agent. This requires paying a fee, but it is a useful service for non-residents of Japan who wish to continue owning real estate in Japan. KEN Corporation can find you such an agent.
For other information and data related to real estate investment in Japan, see the "For Owners" section of our website.

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